U.S. companies and insiders are rushing to buy shares, sending a signal that U.S. stocks’ stellar performance in November is expected to continue.
In the past month, the value of the U.S. stock market has surged by US$500 million. Goldman Sachs’ corporate client repurchase activities have experienced “substantial growth.” A similar situation has occurred with Bank of America’s repurchase platform. The busyness of executing orders has just hit the busiest week in the company’s history.
According to data compiled by strategists including Jill Carey Hall and Savita Subramanian, repurchases by Bank of America’s (BofA) corporate clients have remained above seasonal levels for three consecutive weeks, with one week’s repurchases reaching a record high of $4.8 billion. .
Corporate insiders are also in stock-buying mode. Business executives and executives rushed to buy their own stocks in November, with the ratio of buyers to sellers about to hit a six-month high, according to data compiled by the Washington Service.
Mike Bailey, director of research at FBB Capital Partners, said: “Corporate insiders believe in a bull market scenario of falling inflation, an end to rate hikes, and mission accomplished. They want to get a better grasp of that message and are willing to pay big money to do so. It’s twofold. There are signs of optimism, with corporate and internal executives buying back their own stocks.”
As of this Monday (27th) in November, nearly 900 corporate insiders have purchased their own stocks, more than double the number last month. Although the number of sellers has also increased, the magnitude is smaller, causing the buying and selling ratio to jump to 0.54, the highest since May.
The enthusiasm within companies for repurchasing shares echoes the optimism in the market.Retail investors and large fund managers are exiting bearish bets, with fear of missing out expected to keep theS&P 500 IndexUshering in the best November ever.Venu Krishna, a strategist at Barclays Bank, also forecasts 2024S&P 500 IndexThe target price is raised by 300 points to 4800 points, with room for a 5% increase from the current level.
After consecutive earnings contractions, data compiled by Bloomberg Intelligence showedS&P 500 IndexComponent companies returned to positive profit growth in the third quarter. Bailey said as corporate profit expansion accelerates next year and interest rates slide, stocks will be viewed as an attractive investment, especially those that have been left behind this year in a rally led by the Magnificent 7. of stocks.
Bailey said: “In addition to the Big Seven, there are many profitable and growing companies whose stock prices have been depressed this year. Insiders may be eager to buy these underperforming companies in the hope that things will change next year. , small companies defeat big companies.”
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2023-11-29 06:00:03
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